More on Seven Sharp

February 13th, 2013 at 7:00 am by David Farrar

Joe Nunweek has blogged what is probably the most detailed critique of Seven Sharp. It’s a good read.

As I have blogged previously I have generally enjoyed the show. But there was one part this week that really made me groan. They had someone on for 5 to 10 minutes to give his view of how the entire banking system was a Ponzi scheme and that the Reserve Bank should just print more money or something (no it wasn’t Russel Norman – this guy made even Russel seem rational). Then at the end of the entirely unchallenged viewpoint:

“Now, we could have had any number of economists in to discuss the yin and the yang of what we’ve just seen, but we’d rather know what you think!”

Aaarrgh!

I’m all for viewer input and feedback but they are complementary for expert opinion – not a substitute for it. Especially in an area such as the financial and banking system. It was an appalling decision to not only refuse to have anyone to to put the other side of what the Social Credit type activist was claiming – but to actually boast of how they were not interested in having a well-informed discussion. If they had put on an economist on, then the viewer would have been in a better position to give feedback. Feedback is not a substitute for analysis.

To give credit to Greg Boyed, he did at least attempt to point out why the banking system is not a ponzi scheme.

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37 Responses to “More on Seven Sharp”

  1. freedom101 (504 comments) says:

    Seven Sharp makes Holmes look like the BBC. After watching for couple of evenings I’ve checked out and won’t be coming back. Good luck to them, it’s a complete waste of time and an insult to the viewer. You would have to have a lot of time on your hands if you could justify spending 30 mins watching this.

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  2. Pete George (23,559 comments) says:

    “(no it wasn’t Russel Norman – this guy made even Russel seem rational)”

    Ah, no, Norman was promoting this item.

    Don Richards and Norman stood in Rongatai last election. And there may be some connection on this. Immediately after Seven Sharp showed it Norman was promoting it on Twitter:

    Russel Norman ‏@RusselNorman

    If we let private banks create money for profit, why not allow Govt to create money to pay for Chc rebuild?

    Link to IMF paper that says that private banks control money creation process, and that this is a problem:

    http://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf

    The ‘IMF Paper’ has been controversial, called The Chicago Plan Revisited.

    “This Working Paper should not be reported as representing the views of the IMF.”

    It has raised some critical comment:

    A mini-furor has arisen over an IMF Working Paper entitiled The Chicago Plan Revisited (Jaromir Benes and Michael Kumhof), gathering attention in the mainstream economic press and positive consideration from economists such as Steve Keen.

    Versions of The Chicago Plan, once the exclusive domain of cranks and semi-radicals like Dennis Kucinich, have now gained a certain amount of traction.

    The publication of this paper under the imprimatur of the IMF, of all organizations, while not exactly an endorsement, lend these venerable ideas a new credibility.

    I blogged on this last week: Money creation, social credit and Russel Norman

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  3. ross69 (3,652 comments) says:

    If they had put on an economist on, then the viewer would have been in a better position to give feedback.

    Just the other day you were saying the show is infotainment. You should never use the words economist and infotainment in the same sentence. :)

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  4. Alan Johnstone (1,087 comments) says:

    I watched both 7 Sharp (or 7 Shambles as we call it in our house) and Campbell Live last night;

    They both interviewed Winston, John Campbell (not without flaws himself) was brutal in his demolition of Winston; he didn’t allow him to prevaricate or set the tone.

    Boyd on 7 Sharp let Winston ramble and control the interview, he asked multi part questions that were too long and lacked punch. It was as bad as a Mark Sainsbury interview.

    Might be ok if you’re looking a bit of fluff, but as a show that performs analysis of the news, it’s fatally flawed.

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  5. ross69 (3,652 comments) says:

    To give credit to Greg Boyed, he did at least attempt to point out why the banking system is not a ponzi scheme.

    To be fair, the banking system isn’t a lot different from a ponzi scheme. The main difference is, the banking system has the backing of the government.

    http://www.globalresearch.ca/the-wall-street-ponzi-scheme-called-fractional-reserve-banking/11600

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  6. bhudson (4,740 comments) says:

    I tried watching Seven Sharp a couple of nights ago. There is more depth and quality in a puddle of fetid water.

    This piece though, the failure to get expert commentary on a topic such as the banking system, should consign the show to the dust bin of history.

    Taking that along with John Campbell claiming that media shouldn’t have to present a neutral, non-partisan position, these programmes should be made to come with health warnings – watching these things can distort your mind

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  7. tvb (4,421 comments) says:

    This is a children’s show designed for people of low intelligence and under 30. I guess older and richer people will watch Campbell who is showing his age.

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  8. m@tt (629 comments) says:

    A program like seven sharp has no business discussing banking anyway. They should stick to naturists and discussing the latest fashion trends and leave the discussion of adult topics to an intelligent news show.

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  9. Mobile Michael (451 comments) says:

    George Bailey explained it best in “It’s a wonderful life”. The money “created” by banks is actually the assets owned by its borrowers. Because they are not liquid then a bank can’t call them in.

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  10. kowtow (8,464 comments) says:

    freedom 101: “an insult to the viewer”. TVNZ has been insulting us for years. To add injury to that insult ,the tossers are using our money to do it!

    tvb; I don’t think any older richer folk would be stupid enough to watch the commie,fashion label little prick Campbell.

    AJohnstone; “7 shambles”,excellent.

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  11. scrubone (3,099 comments) says:

    I know enough about banking to know that those who think they know a lot about banking know nothing about banking.

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  12. scrubone (3,099 comments) says:

    ross69: from your regular comments here, a number of people probably consider you to be a crazy left-wing type. Way to prove them wrong.

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  13. mavxp (483 comments) says:

    Adam Curtis did this short video on the rise and fall of TV journalism.

    7 sharp’s inability to make an objective decision about the validity of arguments presented fits with Curtis’s conclusion about the state of media today.

    http://www.youtube.com/watch?v=O9FaIyc4vpU

    What they need is to teach journalists the Socratic method of dialectics, and bring that to the fore in their presentations

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  14. alloytoo (542 comments) says:

    ARRRRGH

    How difficult is it for people to realize that the value of our fiat currency is not based on faith or make believe, by rather it is the value the global market places on the goods and services of our economy divided by the currency in circulation.

    If you print money you don’t suddenly revalue those goods and services, they retain their market values. You can’t buy more goods and services by printing money, the prices of those goods and services simply adjust.

    Furthermore banks don’t just make money.

    Under fractional reserve banking they can only lend you a portion of depositors money.

    Simply put I put $100 dollars in the bank they can lend you $80.

    Sure you can spend my $80 dollars, but I can’t. And the interest you pay the bank is the opportunity cost or rental on my $80 precisely because I cannot use it.

    If you do the maths (A simple excel spreadsheet) you can calculate how much “money” can be created by the banks (The figures these activists like to quote) , you can also work out how much of that money is locked in the banks as reserves (the same amount).

    How can serious journalists entertain these nutters…. oh wait as the logo indicates, it’s Seven Fuzzy.

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  15. KiwiGreg (3,255 comments) says:

    @allytoo you are incorrect. The banking system does “create” money. There is nothing mystical about this, if they didn’t the money supply would be limited to the amount of physical currency, which is of course only a small fraction of the total money supply.

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  16. Peter (1,712 comments) says:

    My friends daughter is in the target demographic. I asked her if she watched it.

    No.

    Why not?

    She gets all her news from the internet.

    Does anyone in her flat watch it?

    No.

    Why?

    They get all her news from the internet.

    It’s not just that the show is bad, it’s trying to talk to people who aren’t even there! The only people watching TV1 at 7pm on weeknights are middle-aged and older.

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  17. Manolo (13,765 comments) says:

    The only people watching TV1 at 7pm on weeknights are non-discerning middle-aged and older. :D

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  18. Peter (1,712 comments) says:

    Yes indeed :)

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  19. BeaB (2,123 comments) says:

    Sell TVNZ.

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  20. Paulus (2,627 comments) says:

    Seven PM – I am told that at the same time as Campbell, the targetted viewers of TV1 are more concentrated on Shortland Street – murders, near murders and plenty of sex.
    Why watch TV! or TV3 at 7pm – they are tame and boring I am assured – this Hospital fantasy will get the targetted vote.

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  21. ross69 (3,652 comments) says:

    The money “created” by banks is actually the assets owned by its borrowers. Because they are not liquid then a bank can’t call them in.

    Obviously you’ve never heard the term mortgagee sale.

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  22. RightNow (6,994 comments) says:

    alloytoo, “Simply put I put $100 dollars in the bank they can lend you $80.”

    And that $80 when banked can be used to lend another $64, which when banked can be used to lend another $51.20 etc etc.
    Every time the money is banked it can be lent. Even if you spend it in a shop they’ll bank it at some stage.

    Given a reserve level of 20% per your example, it is possible to multiply the original deposit by 5x with fractional reserve banking. If the reserve level was 10% it would be possible to multiply by 10x.

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  23. wreck1080 (3,910 comments) says:

    But how can you call economists so -called experts when they cannot even predict the worst financial crisis since the great depression?

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  24. alloytoo (542 comments) says:

    Rightnow & Kiwigreg

    Once more for the arithmetically challenged.

    If one persistantly cycles $100 through the fractional reserve banking system at 20% reserve one will after about 40 transactions be left with 1c cash in the economy and $99.99 in the bank as 40 fractional reserves.

    The banks would have lent out $399.97 against deposits of $499.96.

    Net money in the bank ($499.96-$399.97)=$99.99. Cash money in the economy 1c

    Fractional reserve banking does not “Create” money it provides a market for unused money to be ‘rented’ to people who wish to use it.

    That is why we pay interest, because we have the use of the money depriving others of that use.

    Simplistically.

    The reserve bank is mandated to create fiat money (money without gold backing) because the money in circulation is representative of the sum of the goods and services in our economy.

    If the reserve bank creates too much money it doesn’t effect the intrinsic value of the goods and services, but it debases/devalues the currency resulting in inflation. Inflation hurts those with cash holdings and fixed incomes and encourages those with the means to borrow more (simply because inflation devalues their debt too.)

    If the reserve bank creates too little money then the value of the currency increases, this is deflation. Deflation dampens economic activity because people expect things to be cheaper tomorrow and hence postpone purchases and horde money.

    The US and UK have resorted to QE (expanding their money supply) in order to stimulate their economies because they have no other monetary policy tools available. This has debased their currencies vs ours.

    Our currency has however remained relatively stable against currencies which haven’t been subject to QE. (Oz in particular), our inflation is low, we have moderate growth, and (relative to the rest of the world) low unemployment.

    There is nothing fundamentally wrong with our economy especially when compared to the rest of the world.

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  25. ross69 (3,652 comments) says:

    In the south of France is a small town, very dependent on tourism. But the weather has been wet and dull all summer, and the visitors have not arrived. The townspeople have fallen into debt. They hoard what little money they have against an uncertain future, and business has dwindled away.

    One day the rain stops, the sun emerges, and a rich Russian tourist drives into the town square. He enters the hotel and asks to see a room with a sea view. The proprietor produces a choice of keys but asks for a 100 Euro deposit in case of loss. The Russian agrees and walks up the stairs to inspect the available rooms.

    The proprietor immediately races around the corner to the grocer, and uses the 100 Euros to pay an overdue bill. The grocer now runs to the wholesaler with the money to discharge a debt of his own. The wholesaler owes money to a nearby farmer, so the money is now passed to him. The farmer also owes money, to the town prostitute with whom he has regular appointments, and with a happy kiss she accepts the money from him. But the prostitute also owes money – to the hotel owner, whose rooms she rents.

    At exactly the moment that the prostitute is pressing the Euro note into the hands of the hotel owner, the rain resumes. The rich Russian descends the stairs and announces he won’t stay in the hotel after all. He returns the keys; the hotel owner returns the deposit; and the Russian drives away. Everybody in the town stands in exactly the same position that they did an hour before. But with debts extinguished, the mood has changed. The town’s recession has ended, and the townspeople can look to the future with confidence.

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  26. RightNow (6,994 comments) says:

    alloytoo “Rightnow …Once more for the arithmetically challenged.”

    If you can point out any error in my comment I won’t call you a cock-smoking blowhard.

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  27. Ed Snack (1,872 comments) says:

    RightNow, your assumption is that each extra transaction is banked, as a deposit. Which is, at best exceptionally doubtful.

    And Ross69, there’s an alternative version of that story that runs a bit like this:

    It is a slow day in a little Greek village, planet earth. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner thinks about maybe beating the tourist to death, but decides to give him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and shoves it in his pocket. He owes Piraeus Bank down the street €100,000 but has little intention of repaying it as his business has been contracting for several years. That bank also has claims of €10,000 on a butcher’s business, €50,000 on a pig farmer, €75,000 to a supplier of feed and fuel, but in turn owes €100,000 to EFG Bank which itself has fractionally reserved claims on a pub owner and a prostitute who bought two homes on 105% LTV among many others.

    At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, and asks for his €100 note back. The Greek innkeeper asks “what €100 note?” The German threatens to call the police. The innkeeper says “go ahead, ask for my brother who’s a Lieutenant down at the precinct, he’ll help you out.” The German storms out back into the night, €100 poorer. No one produced anything. No one earned anything. However, the whole village is still buried in debt and looking to the future with a lot more optimism at the thought that maybe the Germans really are that gullible.

    With a hat tip to Zero-hedge for the story although it can be found at several places

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  28. alloytoo (542 comments) says:

    Rightnow

    Because there is never 5x the amount of money available to do economic work.

    There is only at any one time a maximum of $100 dollars available, and thereafter less.

    The money lent may add up to $500 dollars, but nobody can actually spend $500.

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  29. RightNow (6,994 comments) says:

    Ed Snack, I haven’t made (nor expressed) that assumption, rather I have explained the theory.

    Alloytoo – I’m interested in this ‘economic work’ – can you provide a link to a definition?
    I would personally have assumed earning interest would count as economic work, yet you are clearly stating that is not the case.
    With FR banking the multiplier is a theoretical limit determined by the reserve fraction (limit as per mathematical limit).
    Interest can be earned on the original deposit times the multiplier (theoretically – admittedly it assumes infinite recursion of depositing to reach the full multiplier).

    The point is the bank(s) can earn several times more than the interest on loaning out 80% of the original deposit.

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  30. alloytoo (542 comments) says:

    @Rightnow

    By economic work I mean simple spending the money as appose to banking it. (no fancy esoteric economic meaning), if it’s in the bank you can’t spend it (for whatever purpose), and interest compensates for that.

    The banks would be paying depositors interest on $500 dollars (per my example) and earning interest on $400.

    I’m not sure what merit your point has.

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  31. RightNow (6,994 comments) says:

    Which is why the margin between interest banks pay on deposits and what they charge on loans is greater than the reserve level. Talk about arithmetically challenged. Cocksmoking blowhard.

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  32. bc (1,367 comments) says:

    Campbell Live had higher ratings than 7 Sharp for Tuesdays episode.
    A one-off blip or the start of a trend?
    Time will tell, but TVNZ must be starting to get worried.

    My prediction:
    If the ratings slide continues for 7Sharp, TVNZ will abandon a daily current affairs show completely, and put a cooking show/reality show on in the timeslot. They will refuse to go back to the old Close Up format.

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  33. thedavincimode (6,759 comments) says:

    ross69

    That little tale simply underscores the point alloytoo is making. There was no wealth created in the circular exchange of that note. It was merely the means by which a series of receivables and payables of equal monetary amount were satisfied within a group of people. The wealth arising from the original transactions had already been created and it was those transactions that gave rise to the corresponding debts between the parties that were satisfied by the transfer of the note.

    The same outcome could have been achieved by the hotelier writing a promissory note or cheque that instead of being banked, was endorsed by each of the parties until eventually being returned to him. The group of people could also have achieved the same outcome by meeting in the bar and agreeing between themselves that they would offset the respective debts owed and receivable by each of them. They could have gone to their accountant and satisfied those debts by book entry. In each case, there would be no alteration of their net worth (except to the extent that the creditworthiness of another party was at issue); merely the effective offset of a debt receivable against a debt payable.

    In fact, the irrelevancy of the note is also demonstrated by the fact that they could have all met at the outset and agreed to a series of bartar transactions where no money was to be exchanged. Instead, they could have jointly agreed that each would perform the services/provide goods in exchange for the services/goods supplied to them. Those bartar transactions would have created wealth.

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  34. Left Right and Centre (2,975 comments) says:

    Seven Sharp is shit and sinking like the Titanic

    hence….

    ‘SS Shitanic’

    I like 7 Shambles though.

    How about… ‘Seven Sharp presented tonight by Three Dull cock-smoking blowhards’.

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  35. Left Right and Centre (2,975 comments) says:

    You’re all cock-smoking blowhards mate. Sorry…. I love that eh… cock-smoking blowhard!!!!

    Saved to memory.

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  36. alloytoo (542 comments) says:

    @Rightnow.

    An entity that buys cheap and sells dear is called a business.

    The difference in prices is called gross profit.

    Gross profit is used to pay overheads: Buildings, staff, IT systems and in the bank’s case, the cost of holding reserves.

    The remainder is called net profit (Used to pay tax and dividends).

    I see that in addition to being arithmetically challenged you also require lessons in basic economics.

    This one was free because I had to dumb it down a bit.

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  37. alloytoo (542 comments) says:

    If I recall Closeup had consistantly twice the viewership of Campbell live, to have your viewership effectively halved in two weeks is an impressive decline.

    It seems that the viewers are more indifferent of blech infotainment than sometimes stale serious journalism.

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